Punjab National Bank (PNB) Managing Director and CEO Ashok Chandra has announced that the bank will enter acquisition finance in the third quarter of the current financial year, as reported by PTI. The RBI recently opened the window for lenders to engage in acquisition finance activities, with the central bank increasing the lending limit to up to 75 percent of the deal value from the 70 percent proposed in the draft rules. According to Chandra, the acquisition finance market is a very, very big market and ample opportunities are there in the system. The bank has received policy approval for acquisition financing in the last board meeting and is currently looking for a suitable partner to initiate operations from Q3 onwards. PNB will begin acquisition finance with domestic entities to help diversify their asset portfolio.
India's new foreign investment framework could allow non-resident Indians (NRIs) and overseas citizens of India (OCIs) to join the National Pension System (NPS), boosting foreign capital inflows. According to the Draft Foreign Exchange Management (Foreign Investment) Rules, 2026, as reported by The Hindu BusinessLine, a person resident outside India, being an NRI or an OCI, may subscribe to the NPS governed and administered by the pension fund regulatory and development authority (PFRDA). The annuity or accumulated savings will be repatriable, providing overseas Indians with a structured long-term investment option in India's financial markets.
As of June-end 2026, assets under management (AUM) under the NPS stood at ₹17.27 lakh crore, according to The Hindu BusinessLine reports. The current subscriber composition shows State government employees accounting for 51 per cent of total subscriptions, followed by Central government employees at 25 per cent, the corporate sector at 17 per cent, the all-citizens category at 5 per cent, and the Unified Pension Scheme-Central Government at 2 per cent. This expansion to NRIs and OCIs represents a significant shift in the system's accessibility and potential for foreign capital mobilization.
The Reserve Bank of India withdrew the interest rate ceiling on fresh Foreign Currency Non-Resident (Bank) deposits of 3-5 years' maturity last month to attract foreign currency deposits by Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Persons of Indian Origin (PIOs). Asked about the foreign currency deposit mobilisation drive, PNB Managing Director Ashok Chandra said the bank has collected USD 425 million till July 17. "We aim to mobilise up to USD 2.5 billion in FCNR (B) deposits till September 30," he stated. PNB currently offers interest rates varying from 4.9-6.5 percent on FCNR (B) deposits depending on tenure and amount. The move came after FCNR (B) deposit inflows weakened sharply, with net inflows dropping to just USD 946 million in FY26 from USD 7.1 billion in FY25.
The NPS access proposal is part of a comprehensive package of measures announced by the government and RBI last month to attract foreign capital. These include expanding the list of 'specified securities' under the fully accessible route (FAR), increasing investment limits for NRIs and OCIs in listed equities, and the RBI bearing the full hedging cost for banks raising fresh 3-5 year FCNR (B) deposits. These measures are specifically aimed at attracting dollar inflows and supporting the rupee, which is facing pressure from rising crude oil prices and foreign portfolio investor (FPI) outflows from equity markets amid the ongoing West Asia conflict.
According to Akshat Khetan, Founder, AU Corporate Advisory & Legal Services, as quoted by The Hindu BusinessLine, the draft FEMA (Foreign Investment) Rules, 2026, represent a significant liberalisation of India's foreign investment regime. The proposal is described as a strategic move to encourage long-term participation by overseas Indians in India's financial markets and attract stable foreign capital rather than short-term flows. The rules also establish clear distinctions between different types of foreign investments, with Foreign Direct Investment (FDI) referring to foreign investment of 10 per cent or more in company equity, while Foreign Portfolio Investment refers to foreign investment of less than 10 per cent.
The proposed rules will allow public companies to issue equity shares or offer existing shareholders' equity on international stock exchanges, subject to specified conditions, according to The Hindu BusinessLine. Khetan noted that this would expand access to global capital, improve valuations, enhance liquidity and visibility, and reduce dependence on domestic markets. The framework also provides greater legal certainty, improve regulatory clarity, simplify compliance requirements, and ensure that investments crossing the 10 per cent threshold are regulated as strategic investments. These comprehensive changes represent a modern and investor-friendly framework for foreign investment in India's financial markets.
